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THE cost
of shipping Middle East crude to Asia, down by the most
in three months last Friday, may extend its decline as
the number of ships for hire exceeds cargoes.
Refineries need to arrange the shipment of about 35 to
40 cargoes from Middle East ports in April, a report
from Paris-based shipbroker Barry Rogliano Salles
showed. By contrast, there are 82 vessels that could
reach the region this month.
“It’s a
bit wobbly,” said Halvor Ellefsen, a tanker broker at
SeaLeague AS in Oslo. He expects benchmark rental rates
to fall about another 5 percent before “leveling out.”
Formosa
Plastics Corp., the world’s second-biggest maker of
polyvinyl chloride, hired the tanker Astro Challenge at
a rate of 97 Worldscale points for a cargo to Taiwan,
according to a report from Oslo-based shipbroker PF
Bassoe AS.
That’s
5.4 percent below the London-based Baltic Exchange’s
benchmark assessment of 102.5 points for voyages to
Asia. The rate dropped 14 percent Friday, for its fifth daily
decline.
Astro
Challenge is fitted with a double hull to cut the risk
of an oil spill. The exchange’s assessment, used to
settle freight-derivatives contracts, also takes into
account rentals of single-hull vessels that are normally
cheaper.
Worldscale points are a percentage of a nominal rate, or
flat rate, for more than 320,000 specific routes. Flat
rates for every voyage, quoted in US dollars a ton, are
revised annually by the Worldscale Association in London
to reflect changing fuel costs, port tariffs and
exchange rates.
Hire
rates
EACH
flat-rate assessment gives owners and oil companies a
starting point for negotiating hire rates without having
to calculate the value of each deal from scratch.
At 102.5
Worldscale points, owners of double-hulled very large
crude carriers, or VLCCs, can earn about $65,907 a day
on a 39-day roundtrip from Saudi Arabia to South Korea,
based on a formula by R.S. Platou, an Oslo-based
shipbroker, and Bloomberg marine-fuel prices.
Frontline Ltd., the world’s biggest VLCC operator, said
February 15 it needs $31,400 a day to break even on each
of its supertankers.
Bookings
for VLCCs sailing from the
Middle East to
Asia account for 47 percent of global demand for the carriers,
according to New York-based McQuilling Brokerage
Partners LLP.
Shipments to the
US
and Caribbean, the second-biggest market, account for 14
percent of demand for supertankers. --Bloomberg |
